2009 Fall Report of the Auditor General of Canada – Chapter 5Acquiring Military Vehicles for Use
in Afghanistan – Leopard 2s
The Auditor General's report on military vehicle acquisitions reviews DND's procure- ment of four different
vehicle types – the RG-31 Armoured Patrol Vehicle, the AHSVS heavy truck, the Leopard 2 Tank
Replacement Project, and the LAV RWS project to
convert surplus LAV TUA hulls to ISCs. Here we will
cover the used Leopard 2 TRP.

The Auditor General's report on the Tank Replacement Project provides some details missing from the
TRP LOI. The most important is that 15
Leopard 2A4s were purchased in a separate project to act as a source of spares. It is not clear whether
the 15 new 'donor' vehicles are in addition to 12 "Logistic Stock Vehicles" for parts mentioned in the LOI.

The OAG notes that the earlier-model Leopard C2 tanks
had to be retained for use in Afghanistan because of flaws in the planning and execution of the
Tank Replacement Project. From the outset of the loaned
Leopard 2A6M deployment, the fleet was beset by serviceability problems. To keep the borrowed German
Leopard 2A6Ms operating, CF personnel had to
immediately begin cannibalizing this fleet (including the vehicles earmarked for training ). The end result was
reduced availability and training problems.

Due to delays in the TRP, DND's plans for returning borrowed Leopard 2A6Ms to the German Bundeswehr
were also thwarted. Instead of using refurbished ex-Dutch tanks for training, DND had to exchange those tanks for
the loaned German tanks retained in Afghanistan. Those ex-Dutch tanks will now be refurbished in Germany, brought up to
full Leo 2A6M standards, and transferred to the Bundeswehr in lieu of returned
tanks.

DND's Tank Replacement Project is now running 2 years behind schedule. No ex- Dutch Leopards upgraded to full
2A6M standard is likely to see Afghan service. The TRP was also to cover 'implements' for the Leopard 2s
– meaning mine-rollers, ploughs, and bulldozer blades. In the end, that responsibility was shifted
to another project – the Force
Mobility Enhancement.

Auditors noted that the Tank Replacement Project proceeded quickly by comparison with non-urgent
requirement procurement projects. Their recommendation was that all DND vehicle procurement projects should allow for
training requirements without any need to cut back the number of same-type vehicles available for deployment
overseas. DND agreed but there is little reassurance in their bureaucratic response to the
OAG.

A summary of the OAG's Fall 2009 Report on the Tank Replacement Project
follows:Acquiring Military Vehicles for Use in Afghanistan – Tank Replacement Project

Leopard 2 Tank

Date of project approval: March 2007

Approved cost: $650 million

The first goal was to lease 20 Leopard 2 tanks and two special-purpose armoured vehicles from Germany in
order to meet the urgent need to replace the Leopard 1 tanks that had been deployed to Afghanistan [ ie:
uparmoured CF Leopard C2s ].

The second goal was to purchase 100 Leopard 2 tanks [2A4s and 2A6s], including special-purpose armoured
vehicles [ARVs/AEVs] from the Netherlands, to provide immediate training vehicles for troops in Canada and a
longer-term tank capability.

Twenty [ Leopard 2A6M] tanks were borrowed (not leased as originally approved by the government )
from Germany. These arrived in Afghanistan ... in late 2007.

One hundred [Leopard 2A4s/2A6s] were purchased [from the Netherlands]. Under a separate authority,
National Defence purchased an additional 15 used [ Leopard 2A4 ] tanks that it intends to use for spare parts.
The project is still in progress...

Project Timeline Time from government approval to date first vehicle was available for use in
Afghanistan – Leopard 2 Tank – 7 months

The Tank Replacement Project did not meet all of the most urgent needs

The Tank Replacement Project [is in] two parts. The first part was the most urgent. It was to borrow 20 Leopard 2
tanks and 2 [armoured recovery vehicles] from Germany to replace all the old Leopard 1 [C2] tanks being used
... in Afghanistan. The second part was intended to equip the Army with a fleet of up to 82 Leopard 2 tanks
and 18 special purpose armoured vehicles. The Leopard 2 is a modern tank that provides the Canadian Forces
in Afghanistan with a high level of protection from land mines and improvised explosive devises (IEDs).
It also has a powerful direct fire capability.

Based on [DND's] assessments, the borrowed Leopard 2 tanks have been deployed to Afghanistan and are saving
lives. However, we found that the tanks have not replaced all of the older Leopards in Afghanistan because the
Leopard 2 tanks cannot be fitted with [DND's] land mine ploughs, bulldozer blades, and mine rollers.
These implements are essential to overcome obstacles and mitigate the threat posed by IEDs. As a result, the mission
in Afghanistan continues to [employ] several of the [old] Leopard tanks.

In early 2008, [DND] began work to find a way of fitting mine rollers to the borrowed
Leopard 2 tanks. We were informed that work on this issue is ongoing. [ Ed: Leopard 2A6Ms
in Afghanistan are now being fitted with the mine rollers and other FME gear.]

Our audit found that soon after deployment, a portion of the new [ Leopard 2A6M ] tank fleet could not
be used due to equipment failure. This problem was compounded by a shortage of parts. While
normally considered a last resort, Task Force Afghani- stan almost immediately began taking parts from tanks
on site in Afghanistan and from tanks that National Defence had bought for troop training in Canada
in order to make the necessary repairs. Despite these challenges, the Canadian Expeditionary Command informed us that
it is satisfied with the level of serviceability of this equipment.

The stated goal of the Tank Replacement Project was to have all the borrowed tanks ready for use
in Afghanistan by the end of July 2007. We found that National Defence was unable to meet this goal and it was
not until the end of August 2007 that the first four tanks and two special-purpose armoured vehicles were
delivered to Afghanistan.

Not until mid-October 2007 was the Canadian Expeditionary Command satisfied that
everything was in place to permit their use. Most of the remaining tanks became avail- able for operations in
Afghanistan by the end of December 2007. The Canadian Exped- itionary Command informed us that, despite an urgent
need to have tanks available by July 2007, it was not aware of any negative impact on operations
when this goal was not met. One reasons for this was [an ability] to continue using the old Leopard
tanks.

It should be noted that, while there had been slippages in the project, senior officials recognized
from the outset that the schedule was ambitious and acknowledged that an extraordinary amount of work [ was ]
accomplished in a short period ... by all involved.

One [reasons given by DND to support ] its bid to purchase 100 Leopard 2 tanks from the Netherlands was
to have 20 of these tanks immediately available to train soldiers in Canada, [these ex-Dutch tanks being] similar to
the borrowed tanks used by the CF in Afghanistan. [ Instead ], these training tanks will
remain in Europe to be swapped for the borrowed German tanks that would otherwise have been ... returned to Germany
by September 2009. [ The ex-Dutch tanks must ] be modified to the same specifications as the borrowed tanks
[however] since [those ex-Dutch tanks] have been cannibalized for spare parts, those parts [must] be replaced while
[A6M] modifications are taking place.

These actions will provide Canada with Leopard 2 tanks for use in operations until the recently purchased
tanks are upgraded. However, as a result, Canadian soldiers [must be] sent to train with the German army,
creating additional costs and inefficiencies. In addition, because of a cap on funding for upgrading the
[purchased] Leopard 2 tanks, National Defence will not be able to upgrade all [of the ex-Dutch] tanks
to the desired level. The result is that the training fleet will consist of a different model of tank
than the deployment fleet – a situation that the Canadian Forces considers less than ideal.

We found that National Defence now expects to be able to fully employ the purchased tanks almost two years
later than originally planned. This is due, among other things, to delays in conducting a feasibility study
to help plan the upgrades to the new tanks. Documentation obtained from Public Works and Government
Services Canada shows that PW&GSC issued and then cancelled a request for proposal, thus preventing DND from entering
into a contract with the Original Equipment Manufacturer [Rheinmetall is the Leopard 2 OEM] to gather the
information required for planning the modifications.

The reason documented by PWGSC was that [ reissuing that RFP ] would prevent the OEM from gaining any
advantage in subsequent contracting processes related to the tanks. National Defence also informed
us that PWGSC prevented it from contacting the OEM. As noted earlier, [TRP] will not
be installing implements on the tanks. A new [FME] project has begun, which will include the requirement to deliver
this capability...

Recommendation. When National Defence plans urgent acquisitions, it should rigor- ously assess
the training requirements to ensure that there are a sufficient number of vehicles to meet training needs without
reducing the number dedicated for operations.

National Defence's response. Agreed. In an effort to mitigate the risks associated with the aggressive
processing of an unforecasted operational requirement, the Land Staff has embraced a revised strategy
across two broad fronts designed to more effectively address key project linkages such as training.
First, abbreviated Capability Develop- ment assessments better define what is required to build,
generate, employ, and sus- tain a given capability. With respect to training, the Directorate
of Army Training, as well as Corps Schools/Centres of Excellence, play [a] role in ascertaining [requirements
for training] personnel for [new equipment]. [ Second ], Army staffs closely shepherd training stocks
once an unforecasted operational requirement [equipment] is fielded. This typically involves a synchronized cycle
whereby equipment and/or personnel are moved to facilitate the enhanced training of a unit or units for increased
readiness in preparation for operations...

Conclusion

Unlike non-urgent acquisitions, ... the Leopard 2 Tank Replacement Project [... was ...] procured and
delivered quickly and, in the opinion of National Defence,... contributed to the safeguarding of Canadian
soldiers in Afghanistan...

[DND] should examine its Project Approval Guide to determine how acquisitions can be managed so that urgently needed
equipment can be acquired in a timely manner while respecting accepted project management principles. We found that
document- ation required for ... urgent projects was not produced in a manner that complies with the Department's
own Guide.

In order to use new equipment, there must be adequate training. [In this project, DND] underestimated the need for
vehicles that could be used for training. This means that the number of vehicles available for operations will
be significantly reduced.